Verizon (Quote) has granted MCI (Quote) two weeks to
weigh a rival acquisition offer from Qwest (Quote), the companies
announced this morning.
"It is in the best interests of the stakeholders of both Verizon and MCI to
address recent market speculation regarding Qwest's claims that it can
deliver greater value to MCI's shareholders," Verizon said in a statement.
The New York telecom carrier added that it is confident MCI will conclude
that a Verizon-MCI deal is more compelling than a Qwest-MCI combination in terms of long term prospects -- despite a lower price tag.
Qwest is offering $8 billion for the Ashburn, Va., carrier, while Verizon has a handshake deal for $6.7 billion.
The grace period, which expires March 17th, is the latest in the high-stakes competition for MCI, which is coveted by both Baby Bells for its government and corporate customers as well as its backbone network assets.
The development will be welcome news for Qwest executives who have been frustrated and baffled by the lack of response to its overtures.
Some MCI shareholders will also be relieved that company officials will scrutinize Qwest's offer. Many have publicly questioned whether MCI directors were fulfilling their responsibilities by brushing aside Qwest's bid.
In a statement issued this morning, MCI seemed mindful of the criticism. "MCI's board remains committed to performing its fiduciary duties and will
evaluate Qwest's position over the next two weeks," MCI said.
Verizon CEO Ivan Seidenberg also made the company's case to members of Congress today, saying that Verizon-MCI would be good for the telecom industry and customers.
If the deal is approved by regulators and shareholders, Verizon would
continue "investing heavily in the growth segments of the marketplace, such as wireless and broadband," Seidenberg said, according to a transcript of his remarks released by Verizon.
A Verizon spokesman was not immediately available to comment on whether Verizon is prepared to revise its offer if MCI finds Qwest's bid attractive.
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